Following the success of a price cut in India, which led to increased user engagement and revenue growth, Netflix is looking to adjust its pricing strategy to offer a variety of price points and feature sets to users around the world.
In what way? In an earnings call for Q1 2023, CFO Spence Neumann said that in response to increased demand for digital content and fierce competition, Netflix lowered tariffs in India by 20-60% in December 2021.
As a result of higher engagement in India as a result of improved content and cheaper rates, the company claimed a 24% growth in revenue in 2022, up from 19% in 2021.
According to a letter sent to shareholders, Netflix plans to roll out price reductions in an additional 116 countries during the first quarter of this year to increase international adoption. Increased adoption in these regions is considered vital to Netflix’s long-term viability, despite contributing less than 5% of revenue in FY22.
The company is actively trying to get new customers and keep the ones it already has in countries like India, where the growth of its paid member base has slowed down after a pandemic-driven subscriber spike.
Netflix, which considers itself a premium player in India’s streaming market, announced its cheapest plan in July 2019 for a country where smartphones dominate the streaming market. This bundle was discounted to €149 in December.
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